### QBffice of tly Elttornep @eneral

DAN MORALES ATTORNEY GENERAL 

## &tate ofQkxae July 29, 1996 The Honorable Clyde Alexander Chair, Committee on Transportation Texas House ofRepresentatives P.O. Box 2910 Austin Texas 787682910

Dear Representative Alexander: Qpiion No. DM-403 Re: Whether V.T.C.S. article 9030, section 2, which limits the liabiity of an excursion train operator to $5,000,000 per occurrence, violates Texas Constitution article J, section 13 (RQ-878)

Article 9030, section 2, V.T.C.S., limits the liabiity of an excursion train operator to $5 million per occurrence. Article J, section 13 of the Texas Constitution prohibits the legislature from taking an injured person’s right to a legal remedy. We consider whether V.T.C.S. article 9030, section 2 contravenes article J, section 13 of the constitution. Although we are unable to detinitively answer your question, we believe a court probably would conclude that V.T.C.S. article 9030, section 2 isunconstitutional. The legislature enacted the whole of article 9030 in 1995.’ Under the article, the comptroller may certify the owner of a passenger train as the operator of an excursion train if the train is used primarily for tourism or public service and promotes the state’s tourist industty.2 Jn addition, to be certified, the passenger train owner must be insured against liability resulting from injury to persons or property damage in the amount of at least %5,OOO,OOO.s

Any person who is certified is, according to section 2(a), “not liable for injury or damages over $5,000,000 resulting fiorn a single occurrence.” Moreover, this limitation of liabiity extends to the operator of the excursion train the owner of equip ment the train uses, the owner of the track the train uses (which you call the “trackage”), and the host carrier.4 The statute does not limit liabiity, however, ifthe injury or damages arise t?om “intentional, malicious, or grossly negligent conduct.“s

‘See Act ofMay 21,1995,74th Leg., RS., ch 910,1995 Tcx. Sess. Law Serv. 4448.4448-49. 2V.T.C.S. art.9030,s l(a).

‘ Id. 0 l(b).

‘ Id. 0 Z(b). An excursion train operator must noti@ pasengm oftheIimitationon lisbilityin two ways. First, the operator must print, on each passenger’s ticket, in 12-paint boldthce type: “THE OPERATOROF THIS TRAlN IS NOT LIABLEFORPERSONAL INJURYOR WRONGFUL.DEATHThe Honorable Clyde Alexander - Page 2 (DM-403)

In enacting article 9030, the legislature apparently was motivated by a desire to make excursion train tickets affordable and thereby provide economic benefit to the communities at which the trains stop.6 Prior to 1995, excursion train operators were governed, with reference to the amount of liability insurance they must carry, by the rules of the commercial train operators that own the trackage.’ Thus, if a commercial train operator required an excursion train operating on its trackage to carry liability insurance in the amount of $25 million, the excursion train would have to comply.* The legislature believed this requirement reduced the chances that an excursion train operation would be viable and consequently reduced the economic benefit towns at which the train stops would receive:

[This requirement that excursion tram operators must carry liability insurance in the amount of $25 million] places a hardship on excursion train operators because they are operating for the sole purpose of transporting tourists on scenic routes, and their traveling speed does not exceed 40 m.p.h. at any given time. [It] makes it necessary for excursion train operators to increase the ticket prices for their trips to an excessive amount in an attempt to recover the cost of the liabiity insurance. The excessive amount of the tickets greatly reduces the demand for the trips offered by the excursion train operators, and is detrimental to the economic benefit provided by the passengers to the smalltowns where the train stops along the route.g

(footnote continued) INANAMOUNT

INEXCESS

OF$5,ooO,OW.”

Id. 54(l). Second,

theoperator

mustprintanidentical disclaimer,

inlettersatleasttwoincheshigh, andpost it neara passengerboarding area. Id. 8 4(2). 51d. 5 2(c). Article 9030, section 2(a), V.T.C.S., does not limit an excorsion train operator’sliability if, at the time of the injory or damages, the operatorfailed to maintain liability insuranc-0in the rqoisite amount orifthe operatorcarriedfreight (other than personal luggage), commuters, orpassengers tmveliug solely forbusiness orcommercial reasons. See also id. 8 5. %See House Tramp. Comm.,Bill Analysis, H.B. 1208,74th Leg. (1995).

*Id. Howe Bill 1208’s bill analysisststes thatfederal

lawrequires

acommercial

trainoperator

to maintain liability iusunmce in the amountof $25 million peroccunaee. Id. We were onable to find that federallaw,however.Ifthelawexists,itpreempts statelawtotheextentofanycontlict. SeeAttorney General Opinion DM-154 (1992) at 4 (stating that, underUnited States constitution article Vl, clause 2, statelawthatcontlictswithfederal lawispreempted)(citingEnglish Y. General Elm. Co., 4% U.S.72, 79 (1990)). %IooseTramp. Comm., Bill Analysis, H.B. 1208,74th Leg. (1995).

p. 2212The Honorable Clyde Alexander - Page 3 (DM-403)

You indicate that, despite the new statutory limitation on liability, a commercial train operator, Union Pacific Rail Corporation, requires excursion train operators that use its trackage to carry liability insurance in a minimum amount of $25 million per occurrence. Union Pacific, you state, believes that the new law is unconstitutional. You therefore ask about the constitutionality of V.T.C.S. article 9030, section 2(a) and (b). You do not indicate which constitutional provision or provisions you are concerned about. We believe, however, that article I, section 13 of the Texas Constitution is the relevant provision. Article I, section 13ofthe Texas Constitution mandates that all courts be open and that every person whose real or personal property, body, or reputation is injured have a remedy by due course of law.rs Article I, section 13 guarantees not only access to the courts, but meunin@id access.rr As one court has said, article I, section 13 guarantees a plait&f the right “to obtain 6111 redress for injuries caused by another’s wrongtirl conduct.“t2 The Texas Supreme Court has interpreted this “open courts” provision to forbid the legislature to deny a citizen the right to seek through the courts a remedy for an intentional injury.13 In addition, the court has applied the open courts provision in cases involving negligent injury.r4 In our opinion, the Texas Supreme Court’s decision in Lucus v. United .St~fes~~ controls how we must analyze your question. In that case, the court addressed the constitutionality of the statutory limitation on damages a plaintiff can receive in a medicalmalpractice action.16 Specifically, V.T.C.S. article 459Oi, section 11.02(a) limits a physician’s or health-care provider’s civil liability in a medical malpractice action to $500,000.r7 This liitation does not apply to medical, hospital, and custodial-care expenses, how-
%ee generally 1 GFDRGE D. BRADEN

ETAL.,THECONSTITUTION OFTHESTATE

OFTFXA%AN ANNOTATED

ANDCOMPARATIVE

ANALYSIS

47,50-51 (1977).

‘&x.s v. UnitedStofes, 757 S.W.Zd687,690 flex. 1988) (emphasis added). %e?ar Hosp., Inc. Y. Estrada, 694 S.W.2d 359, 366 (Tex. App.-Corpus Christi 1985, no tit). 13Middleton v. Texas Power & Light Co., 185 SW. 556, 561 (Tex. 1916). See generally JosephP. Witherspoon, ConstihMonalily ofthe Texas Stab& Limiting Liabilityfir Medical Mdpractice, 10TFX TECH.

L. REV. 419.424-26 (1979). “See Lucas, 757 S.W.2d at 688, 690; Sax v. Votteler, 648 S.W.Zd 661. 664, 665 (Tex. 1983); see also Detar Hosp., Inc., 694 S.W.2d at 361, 365-66.

15757 S.W.2d 687 (Tex. 1988). 161d.at687. 171d.at688-89 (quoting V.T.C.S. art.45901, 5 11.020)).

p. 2213The Honorable Clyde Alexander - Page 4 W-403)

ever.I8 In the event section 11.02(a) is found unconstitutional, section 11.03 provides au alternative limitation on damages: a physician or health-care provider’s civil liability in a medical malpractice action is limited to $150,000 for all past and future noneconomic losses.‘g The Lucus court analyzed the constitutionality of sections 11.02 and 11.03 using a two-pronged approach.20 Fist, to find a statute unconstitutional under article I, section 13 of the Texas Constitution, a court must find that the statute restricts a “cognizable common[-]law cause of action.“21 Second, the court must find that, when balanced against the purpose and basis of the statute, the statute unreasonably or arbitrarily restricts the right to redress.** The court found that a victim of medical negligence has an undisputed, welldetined common-law right of action.23 The court therefore proceeded to consider whether, given the purpose of the statute, the statutory limit on damages unreasonably or arbitrarily restricts that right.*’ The legislature articulated the purposes of V.T.C.S. article 4590i in section 1.02, and they are, primarily, to reduce the fresuency and severity of health-care liability claims, to decrease the costs of these claims and ensure that awards are rationally related to actual damages, and to make available to health-care providers liability insurance at “reasonably affordable rates.” The court found that the legislature did not intend to strike only at frivolous medical malpractice lawsuits, but at all medical malpractice lawsuits.25 The court tbrther found that legislature itself was unsure whether the limitation on damages would lower liability insurance rates.26 The stated purposes, the court concluded, did not support the restriction on redress.*’ Significantly, the legislature failed to provide sn adequate substitute through

‘*Id. at689 (quotingV.T.C.S. art.459Oi,5 11.02(b)). lgId. (quoting V.T.C.S. art.45901, § 11.03) 2oSee id. at 690 (quoting Szx v. Votteler, 648 S.W.2d 661,666 (Tex. 1983)). l’ Id. (quoting Sax, 648 S.W.2d at666). **Id. (quoting Sac, 648 S.W.2d at666). 231d.

*‘ Id. at690-92 151d. at 691 261d. (quoting V.T.C.S. art.45901, 5 l.O2(a)(12))

*‘See id.The Honorable Clyde Alexander - Page 5 (DM-403)

which a medical-malpractice plaintiff may obtain redress for his or her injuries.28 As an example of an adequate substitute, the court pointed to similar statutes in two other states in which the legislature limited a health-care provider’s liability but also established a patient-compensation fund.29 Presumably, a medical-malpractice plaintiff who is not fblly compensated for his or her injuries by the physician or health-care provider may seek additional recompense from this fbnd. The court noted that alleged benefits to society generally are insufficient to uphold a statute against attack under Texas Constitution article I. section 13.M In addition, the court found that the legislature unreasonably limited the recovery available to persons who were catastrophically injured by medical malpractice because the legislature desired to conduct a “speculative experiment” to determine whether medicalmalpractice liability insurance rates would decrease.31 Furthermore, the legislature’s stated purpose to ensure that awards are rationally related to actual damages intruded upon the province of the courts.32 In any event, the court concluded, the legislature unreasonably and arbitrarily determined “that arbitrary damages caps, applicable to all claimants no matter how seriously injured,” assured “a rational relationship between actual damages and amounts awarded.“” We consider now V.T.C.S. article 9030, section 2(a), the statute you cite. Using the two-pronged analysis set forth in Lucq we must decide first whether article 9030, section 2(a) restricts a cognizable common-law cause of action. Second, we must analyze whether the statute unreasonably or arbitrarily restricts the cause of action given the purpose and basis ofthe statute. We find a well-established, cognizable, common-law cause of action for victims of common-carrier negligence.34 The issue thus becomes whether article 9030, section 2(a)

=“Id. at 690. lgId. at 691. Mid. at 690 (citing Wright v. Central Du Page Hosp. Ass’n, 347 N.E.Zd736,742 (Ill. 1916)). 3’ Id. at 691.

‘=Id.

%ee T&on v. PanAmerican World Airways, Inc., 399 F. Supp.335, 339 (S.D. Tex 1975); Jackson v. City of

Dallas. 443 S.W.2d 771, 780 (lb. Cii. App.-Dallas 1%9), rev’d on other grounds, 450 S.W.Zd62 (1970); Simpson v. Dallas Ry. & Terminal Co., 143 S.W.Zd 416, 418 (Tex. Cii. App.- Dallas 1940, wit dism’d); see ah 13 C.J.S. Carriers 5 508, at 458 (1990) (stating that common carrier

p. 2215The Honorable Clyde Alexander - Page 6 cDMm403)

unreasonably or arbitrarily restricts the cause of action. Ultimately, this is a question of fact that is inappropriate to the opinion process. 3J We believe, however, that a court would find the restriction unreasonable. As we have indicated, the legislative purpose for article 9030, section 2(a)‘s limitation on liability is to reduce the amount of liability insurance an excursion train operator must carry. The legislature thereby hoped to reduce the ticket price excursion train operators charge and increase tourism dollars flowing to towns along the trams’ routes. The legislature did not estimate the article’s impact on either ticket prices or revenues from tourists. We note that the statute accomplishes its purposes at the expense of injured passengers, and particularly at the expense of passengers involved in a large accident. Under section 2(a), the operator’s liability is limited to SS,OOO,OOO per occurrence. While a court may find that the statute provides meaningfid access to the courts for one or two persons injured in an excursion train accident, we doubt a court would find the same for a train accident involving, for example, fitly passengers. Furthermore, we question whether a court would tind that a decrease in ticket prices, the size of which the legislature has not estimated, and the increase in tourist dollars, the size of which the legislature has not estimated, justify limiting the damages injured passengers may receive. The purported decrease in ticket prices is even more speculative when we note that article 9030, section 2(a) does not preclude a commercial tram operator such as Union Pacific Rail Corporation from attaching any legal condition it desires to a contract with a train that wishes to use the commercial train operator’s trackage. Accordingly, nothing prohibits the commercial train operator from demanding as much insurance coverage as it wishes. Similar to the statute examined in LUUJS, section 2(a) places the burden of (possibly) lower ticket prices and (possibly) more tourism dollars “upon those persons who are most severely injured and therefore most in need of compensation.“36 Finally, the legislature has not provided an alternative source, such as the patient-compensation find mentioned in Lucus, from which injured passengers may collect damages above and beyond the %5,000,000damages they may collect under section 2(a).

(footnote continued) isliile for slightest negligence, even ifthird party’sconcurring negligence contributes primarilyto accident). 35See,e.g., Attorney GeneralOpinions DM-98 (1992) at 3, H-56 (1973) at 3, M-187 (1%8) at 3, O-2911 (1940) at2.

36Lucas v. United States, 757 S.W.2d 687, 692 (Tex 1988) (quoting Carson v. Maurer, 424 A.2d 825,837 (NH. 1980)).

p. 2216The Honorable Clyde Alexander - Page 7 (DM-403)

For all of these reasons, we believe a court would find the limitation on liability in V.T.C.S. article 9030, section 2(a) contravenes article I, section 13 of the Texas Constitution.37
SUMMARY

To determine whether V.T.C.S. article 9030, section 2(a) contravenes article I, section 13ofthe Texas Constitution, a court would apply a two-pronged analysis. The court would consider first whether section 2(a) restricts a cognizable common-law right of action. Next, the court would consider whether, in light of the purpose and basis of the statute, the statute unreasonably or arbitrarily restricts that right. A court probably would find that the limitation on liability in V.T.C.S. article 9030, section 2(a) contravenes article I, section 13of the Texas Constitution.

DAN MORALES Attorney General of Texas JORGE VEGA First Assistant Attorney General SARAH J. SHIRLEY Chair, Opinion Committee Prepared by Kymberly K. Oltrogge Assistant Attorney General

37A cotutislesslikelytoconclude thatV.T.C.S.

article9030,section2(a)violatestheDueF’mcessorEqual

Protection Clauses oftheUnitesStates

Constitution.TheUnitedStates CourtofAppeals

has concluded Ihatthe limitation on damages in V.T.C.S. article 45901, section 11.02 (the statute at issue in Lucas)wasconsistent

wifhtheseconstitutional

provisions. Lucm v. United States, 807 F.2d 414, 417, 421-22 (5th Cir. 1987). The Texas Supreme Court has, on the other hand, suggested that limitation provisions such as article 45901, s&ions 11.02and 11.03, whicharesimilartothe limitationstatuteaboutwhichyouask, mayviolateTexasConstitution article I, section 3 or article III, section 56. See Lucas v. United St&% 757 S.W.Zd687,689 n.1 flex. 1988).

p. 2217